Hayes v. Nat'l Services Industries
196 F.3d 1252 (1999)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under Georgia law, a client is bound by a settlement agreement negotiated by their attorney if the attorney had apparent authority to settle the case, and this principle applies even to federal Title VII employment discrimination claims.
Facts:
- Robin Hayes was employed as a sales representative by National Service Industries and National Linen Service ('National').
- National terminated Hayes' employment.
- Hayes retained attorney Andrew Rogers to represent her in a wrongful discharge claim against National.
- During settlement negotiations, Rogers expressly told National's counsel, Sharon Morgan, that he had authority from Hayes to settle the case for $15,000.
- Based on Rogers' representation, the attorneys reached a settlement agreement.
- After the agreement was reached, Hayes rejected it.
- No evidence suggests that any limitation on Rogers' authority was ever communicated to National's counsel before the agreement was made.
Procedural Posture:
- Robin Hayes sued National Service Industries and National Linen Service in the U.S. District Court for the Northern District of Georgia, asserting a Title VII claim.
- After Hayes rejected a settlement agreement, National filed a motion to enforce the agreement in the district court.
- The motion was referred to a Magistrate Judge, who issued a report and recommendation to grant the motion.
- Hayes filed objections to the Magistrate Judge's report.
- The District Court Judge overruled Hayes' objections, adopted the Magistrate's recommendation, granted the motion to enforce the settlement, and dismissed Hayes' complaint.
- Hayes, as appellant, appealed the District Court's decision to the U.S. Court of Appeals for the Eleventh Circuit, with National as the appellee.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Under Georgia law, is a client bound by a settlement agreement negotiated by their attorney when the attorney represented to opposing counsel that they had authority to settle, even if the client later claims they did not consent to the agreement?
Opinions:
Majority - Hoeveler, Senior District Judge
Yes, a client is bound by a settlement agreement negotiated by their attorney who had apparent authority. The court held that state law principles of contract and agency govern the enforcement of settlement agreements in federal court, even in Title VII cases. The court rejected Hayes' argument that a special 'knowing and voluntary' standard should apply, stating that standard is not applicable when an employee is represented by counsel. Under Georgia agency law, an attorney is an agent for their client, and an act by an agent within the scope of their apparent authority binds the principal. Because Hayes' attorney represented to opposing counsel that he had authority to settle, and opposing counsel was unaware of any limitations on that authority, the attorney acted with apparent authority, thus binding Hayes to the agreement.
Analysis:
This decision solidifies the principle that standard state agency law, rather than a special federal standard, governs the enforcement of attorney-negotiated settlements in Title VII cases within the Eleventh Circuit. It reinforces the doctrine of apparent authority, placing the burden on clients to clearly communicate any limitations on their attorney's settlement power to opposing parties. The ruling promotes finality in settlements by making it difficult for clients to repudiate agreements by simply claiming a miscommunication with their own lawyer after a deal has been struck. This strengthens the hand of parties who rely in good faith on the representations of opposing counsel during negotiations.
